Chinese citizens continue to invest in Bitcoin and the crypto market, despite the government's intense attack. In September 2017, the Chinese cryptocurrency exchanges BTCC China, Huobi, and OKCoin were closed by the government. At some point, the management of these exchanges could not leave the country because of a government investigation into local cryptocurrencies. Three months later, in December 2017, the same largest Chinese cryptocurrency exchanges moved to Hong Kong. BTCC China, Huobi and OKCoin have changed the brand to BTCC, Huobi Pro and OKEx respectively. They were aimed at satisfying the rapidly growing demand from Hong Kong investors. Shortly after they were carried out, trading platforms began to notice that the daily quantities of Chinese investors are growing exponentially. Somehow, Chinese investors have managed to circumvent China's trade restrictions by using the Hong Kong stock exchanges. How is it possible?
In Hong Kong, it is relatively easy for investors to set up a business. For less than $ 1,000 you can legally create companies, which allows you to open bank accounts in financial institutions based in Hong Kong. Since December 2017, many Chinese investors have transferred funds from their Chinese bank accounts to bank accounts in Hong Kong and began to more actively trade in cryptocurrencies, effectively bypassing Chinese restrictions. But unlike China, Hong Kong has much less supply to meet the growing demand. While China is home to large miners, such as Bitmain, Hong Kong does not produce much Bitcoin and other cryptocurrencies. As a result, bonuses on the Hong Kong cryptocurrency market have increased, surpassing even the South Korean market. On January 18, when the average Bitcoin price in the world was around $ 11,500, Bitcoin was sold over $ 13,000 to Huobi Pro.
Krystal Hu, a Hong Kong financier, noted that non-Chinese traders also began to exploit arbitrage opportunities presented by the Hong Kong market. For example, January 18, the price of Bitcoin on Coinbase was $ 11,800. Buying Bitcoin on Coinbase and selling it on any Hong Kong market would yield a profit of $ 1,200 on every Bitcoin.
The Hong Kong stock exchanges have also integrated the widely used fintech applications in China, such as Alipay and TenCent WeChat Pay. Alipay is a $ 60 billion fintech application that is used by over 50 percent of mobile users. WeChat Pay, which was used by only seven percent of mobile users in 2014, is now used by over 40 percent of mobile users in China. The integration of two fintech payment networks has increased the availability of OTC cryptocurrency exchanges in Hong Kong for Chinese investors, facilitating the investment process in the cryptocurrency market.
In order to prevent Chinese investors from buying digital currency, the Chinese government and the People's Bank of China (PBoC) have asked local banks to disclose any suspicious transactions related to markets based in Hong Kong. However, even this action will not prevent Chinese investors from accessing markets in Hong Kong, due to applications such as Alipay and WeChat Pay.
Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market keeps consolidating below the weekly pivot at the level of $11,143 in neutral market conditions. The nearest resistance at the level of $11,986 is the key intraday resistance for the further moves up. On the other hand, any violation of the level of $10,000 will lead to the test of the key technical support at the level of $9,151.
